RBI on Wednesday opened a special window to help the three state-owned oil marketing companies needing about $8.5 billion every month meet their daily foreign exchange requirement in a bid to check the rupee's free fall.
"On the basis of assessment of current market conditions, RBI has decided to open a forex swap window to meet the entire daily dollar requirements of three public sector oil marketing companies (IOC, HPCL and BPCL)," the central bank said in a statement.
The PSU oil companies are the biggest buyers of dollars, requiring $8-8.5 billion every month for the import of an average 7.5 million tonnes of crude oil. The RBI decision is aimed at curbing volatility in the forex market.
Under the swap facility, the RBI said, it will "sell/buy USD-INR forex swaps for fixed tenor with the oil marketing companies through a designated bank."
The swap facility gets operationalised with immediate effect and will remain in place until further notice, the RBI said.
The rupee on Wednesday collapsed to a lifetime low of 68.85 against the dollar and closed at 68.80, registering its biggest single-day loss of 256 paise, as global oil prices jumped, deepening concerns about the current account deficit and capital outflows.
According to analysts, consistent dollar demand from banks and importers, mainly oil refiners, following higher crude oil prices, kept the rupee under pressure.
India's oil imports during July were valued at $12.7 billion, which was 8 per cent lower than $13.8 billion of oil imports in the corresponding period a year earlier.
During April-July, oil imports were valued at about $54.6 billion, which was 2.65 per cent higher than $53.2 billion in the corresponding period last year.